Bundles from Britain

Last week the New York Stock Exchange took one look at the news from the Balkans, another at the news from the Far East, and dived. In a single day’s trading of less than a million shares, prices lost 3.44 points on the Dow-Jones industrials average, reached their lowest level since last June—18 points above the 1938 low, 76 below the 1937 high. Next day they rallied slightly. But Dow Theorists and other dopesters still read the main trend as down.

Brokers were not disturbed by their sensitivity to war news; they worried more about the market’s fundamental weakness, now almost chronic. It has no “supporting power”—no outer ring of semiliquid investors able to ride out the brief news-born squalls. One reason for this weakness: despite the production boom, corporate earnings are not going up in proportion to corporate sales (see below). Another: much Wall Street buying power has been absorbed by the liquidation of Britain’s U. S. securities. For these unloadings Wall Street had a new name last week: Bundles from Britain.